Self-Employed Mortgage Guidelines On Purchase And Refinance
This Article Is About Self-Employed Mortgage Guidelines On Purchase And Refinance:
Around this time of year, many Americans prepare to file their tax returns.
If you are self-employed this can be a major hurdle. When it comes time to obtain a mortgage, lenders may only use income documented with the IRS. For a W-2 employee, this is simple but for a self-employed individual, this task can be easier said than done.
There are many write-offs associated with being self-employed that take away from your buying power for a mortgage. The more income you claim, the more income taxes you pay. If you are in the market to purchase a home, we recommend you tell your CPA. They will file your taxes with last write-offs to increase your buying power. Sounds easy right?
The problem comes with lenders needing a two-year self-employed average. So, you must file your tax return strong for at least two tax seasons. What happens if that’s simply not an option?
Gustan Cho Associates Mortgage Group has a solution.
12 And 24 Month Bank Statement Loan Programs For Self-Employment Borrowers
We have 12 months and 24 months of bank statement programs. These programs are only for self-employed borrowers. Your income will not be calculated off your tax returns. It will be calculated from your business-related bank deposits. In fact, we will not even ask you for your tax returns.
In this blog, we will detail Self-Employed Mortgage Guidelines On Purchase And Refinance Loans. We will explain how a bank statement loan works and what the process is to obtain one.
Self-Employed Mortgage Guidelines On Bank Statement Loans
Bank statement mortgage loans are available only for self-employed borrowers. There are no maximum loan limits on bank statement loans for self-employed borrowers. There is no private mortgage insurance required
Here are some highlights of our bank statement loan program for self-employed borrowers:
- Bank statement mortgages go one step deeper.
- You must be the sole owner of your business.
- Unfortunately, at this time if you are not the sole owner of your business, we cannot complete a bank statement loan for you.
- Hopefully, that changes in the near future.
If you are in a partnership or not sole owner, tax returns must be used for income qualification.
Self-Employed Mortgage Guidelines And How Do Bank Statement Loans Work?
How does the bank statement loan work?
Very similar to your everyday mortgage product. Meaning, your file will still go through processing and underwriting just like you’re used to. The only difference is how they calculate income.
You will either provide 12 or 24 months of your bank statements. Personal bank statements or business bank statements, whichever you use. From there the underwriter will determine what can be used as business income and come up with a 12 or 24-month average.
Which will be used to determine your debt to income ratio. Bank statement loans are typically capped at a maximum income ratio of 50%, with exceptions at times.
Bank Statement Mortgage Process
The process at this point is the same as every other mortgage loan.
- The house will be appraised, and the title report reviewed by an underwriter and then we are at the closing table
- The Bank statement loan process is not difficult when using a loan officer who knows what they’re doing
Gustan Cho Associates Mortgage Group is an expert with it comes to bank statement loans!
Self-Employed Mortgage Guidelines And Qualification Requirements
- Credit scores down to 600
- Loan amounts up to $3 million
- Up to 90% LTV (loan-to-value)
- It May use for a primary residence, second home, or investment properties
- Jumbo loans down to 600 scores
- 30-year fixed available
- DTI up to 50% (debt-to-income)
- no pre-payment penalty for owner-occupied in second homes
- Seller concessions allowed
- 2-year self-employed history required
Starting The Bank Statement Loan Program For Self-Employed Borrowers
How to begin the bank statement loan process?
Gather the following documents:
- Last 12 or 24 Months Bank Statements – to source down payment and calculate income
- Driver’s License or Government Issued Photo ID
Once you have your documentation, reach out directly to Gustan Cho Associates. Call the bank statement loan expert, Mike Gracz on 630-659-7644 or email [email protected]. Mike with go over your qualifications and will assign you to a licensed loan officer in your state. You will complete an online application and get pre-approved!
Even if you just have general questions, we encourage you to reach out. We may be reached 7 days a week, mornings or evenings! We offer top-notch customer service on all of our mortgage loans. Please check out our reviews on Zillow, our clients speak for us!